Putnam
Voyager
Fund
SEMIANNUAL REPORT
January 31, 1997
[LOGO: BOSTON * LONDON * TOKYO]
Fund highlights
* "Putnam Voyager Fund's star quality remains intact. Combined with solid
returns, modest risk has given this offering a good long-term risk/reward
profile."
-- Morningstar Mutual Funds, January 3, 1997
* Putnam Voyager Fund has received a special Lipper Performance Achievement
Certificate in recognition of its number-one ranking in the capital
appreciation fund category for the 15- and 25-year periods ended 12/31/96.
The fund was the top performer among the 28 funds tracked for 15 years
and the 21 funds tracked for 25 years. The ranking reflects class A share
performance; class B and class M shares were not tracked over this period.
For the 1-, 5-, and 10-year periods ended 12/31/96, the fund's class A
shares ranked 132 out of 189, 24 out of 78, and 3 out of 56, respectively.*
CONTENTS
4 Report from Putnam Management
8 Fund performance summary
11 Portfolio holdings
23 Financial statements
36 Results of February 6, 1997 shareholder meeting
* Lipper Analytical Services, an independent research organization, ranks
funds according to total return performance. Rankings vary over time and do
not reflect the effects of sales charges. Performance of other share classes
will vary. Past performance is not indicative of future results.
From the Chairman
[GRAPHIC OMITTED: PHOTO OF GEORGE PUTNAM]
(copyright) Karsh, Ottawa
Dear Shareholder:
Putnam Voyager Fund began fiscal 1997 just after a rather sharp correction in
the stock market. Although the market recovered relatively quickly, the stocks
of large, established companies were its primary beneficiaries. The
growth-oriented stocks in which your fund generally invests lagged -- and
still lag -- the market averages.
Your fund's managers were quick to spot this trend and tilted the portfolio's
emphasis more heavily toward large-company stocks. The shift moderated the
effects of the drop in growth stocks but it wasn't enough to allow the fund to
catch up with the overall market as measured by the major indexes.
The experience speaks forcefully in favor of maintaining a long-term
perspective when pursuing capital appreciation as aggressively as your fund
does. As you will see in the performance tables on pages 8 and 9, the fund's
results over longer periods remain quite respectable. In the following report,
your fund's managers discuss fiscal 1997 performance to date and the factors
they believe could have a positive impact in the second half.
Respectfully yours,
/S/GEORGE PUTNAM
George Putnam
Chairman of the Trustees
March 19, 1997
Report from the Fund Managers
Roland W. Gillis
Charles H. Swanberg
Robert R. Beck
Putnam Voyager Fund's strategy of diversifying among several types of growth
stocks proved especially valuable during the six months ended January 31,
1997. Your fund's ability to invest in larger, more established companies
helped balance overall performance as other segments of the portfolio
underperformed. During the semiannual period, the fund's class A shares
provided a total return of 14.18%; class B shares, 13.72%; and class M shares,
13.91%. The returns taking maximum sales charges into account were 7.61%,
8.72%, and 9.89%, respectively. For complete performance information,
including longer-term returns, please see pages 8 and 9.
The fiscal year began shortly after a significant market correction for
small-company stocks. On July 11, 1996, the NASDAQ Composite Index, which
covers 4,500 stocks traded over the counter, including many small-company
stocks, fell 35 points. This was one of the biggest declines on record and its
effects have not yet faded. With the exception of a slight recovery in August,
stocks of many small- and medium-sized rapidly growing companies continued to
underperform for the remainder of calendar 1996 and into 1997.
* SEVERAL HOLDINGS PERFORM WELL DESPITE CHALLENGING CLIMATE
In the face of a fairly rough environment for smaller, more aggressive growth
stocks, several of our selections delivered noteworthy performance. For
example, St. John Knits, a designer and manufacturer of women's clothing and
accessories, recently announced record-breaking sales and earnings for its
1996 fiscal year. Also bringing strength to the portfolio were the stocks of
two medium-sized technology companies: EMC Corp., a provider of computer
storage systems, and Parametric Technology, a producer of software for
computer-aided design. While these stocks, along with others discussed in this
report, were viewed favorably as of January 31, 1997, all portfolio holdings
are subject to review and adjustment in accordance with the fund's investment
strategy and may well vary in the future.
Although the performance of small-company stocks was still weak at the fiscal
year's midpoint, we remain optimistic about this segment of your fund's
portfolio. Despite the market correction and declining prices, earnings for
most of these smaller companies have remained intact and their relative
valuations have improved. As a result, we expect that these stocks will shift
back into favor in the months ahead.
* BROADCASTING AND FINANCIAL STOCKS STRENGTHEN PORTFOLIO
Your fund also benefited from increased merger and acquisition activity,
particularly within the broadcasting and tele-communications industries.
Passage of the Telecommunications Act of 1996, which allowed for ownership of
multiple television and radio stations, boosted the stocks of many
broadcasting companies poised for expansion.
The stock of Infinity Broadcasting, in which your fund has long held a
significant position, has performed well since the announcement of the
company's pending acquisition by Westinghouse Electric Corp. The fund has also
benefited from the merger of two of its holdings -- MFS Communications and
WorldCom, Inc. The merger, which will integrate a fast-growing long-distance
company with a local exchange and Internet-access company, is viewed as a good
strategic move for both companies. It is expected to give the new company, to
be known as WorldCom, a strong competitive advantage in the telecommunications
industry.
[GRAPHIC HORIZONTAL BAR CHART OMITTED: TOP INDUSTRY SECTORS]
TOP INDUSTRY SECTORS*
Computer software 9.0%
Retail 7.0%
Business services 5.2%
Medical supplies
and devices 4.6%
Pharmaceutical and
biotechnology 4.5%
Footnote reads:
* Based on net assets as of 1/31/97. Sector allocations will vary over time.
Another area of strength for the fund was the financial services industry and,
in particular, large-company holdings like Citicorp and American Express.
Citicorp, the nation's second-largest bank and the largest U.S. issuer of
credit cards, has recently gained momentum from its international credit card
business. American Express is also pursuing opportunities in the international
credit card business as well as expanding into other financial services areas.
* EDUCATIONAL AND MEDICAL TECHNOLOGY SECTORS PROVIDE PERFORMANCE BOOST
Strong performance came from educational company stocks such as Apollo Group,
Inc., which provides higher-educational programs for working adults. Its
programs reach more than 40,000 students in the United States and Great
Britain. The stock of CBT Group, which provides information technology
training for businesses, was also a stellar performer. The company develops,
publishes, and markets a library of over 130 software titles that allow
employees to tailor training to their work schedules and knowledge levels.
Companies involved in the development of breakthrough medical devices
continued to bring exceptional performance to the portfolio. Boston
Scientific, a leading medical products company, is expected to continue
broadening its product line both domestically and overseas. Medtronic, another
of the fund's medical technology holdings, has developed impressive products,
such as mechanical heart valves, to assist cardiac surgeons and patients.
Starbucks Corp., the coffee roaster and retailer, was another portfolio
standout. In 10 years, the company has grown from 11 stores to more than
1,100. To sustain its growth momentum, Starbucks is working to increase its
brand visibility and is developing new distribution channels for its products.
The restaurant sector was also boosted by Boston Chicken, Inc., which
franchises and operates more than 1,100 Boston Market stores in 38 states.
[GRAPHIC OMITTED: TOP 10 HOLDINGS]
TOP 10 HOLDINGS
Parametric Technology
Computer software
Computer Associates International, Inc.
Computer software
MBNA Corp.
Financial services
EMC Corp.
Computer services
American Express
Finance
Cabletron Systems, Inc.
Networking equipment
Federal National Mortgage Association
Finance
Citicorp
Banking
Cisco Systems, Inc.
Networking equipment
HFS, Inc.
Lodging
Footnote reads:
These holdings represent 12.8% of the fund's assets as of 1/31/97.
Portfolio holdings will vary over time.
* A BETTER OUTLOOK FOR SMALL AND MIDSIZE COMPANIES
We anticipate that the remainder of the fiscal year will bring a better
environment for the stocks of small and midsize companies in the fund's
portfolio. The rate of economic growth appears likely to remain steady in the
coming months; as this occurs, we believe interest rates will also remain in a
fairly narrow range. In such an environment, we expect that aggressive growth
stocks of small and medium-sized companies should shift back into favor.
Regardless of the economic environment, we will remain focused on companies
that can develop innovative products and services that, in turn, should allow
the companies to grow faster than the market. We believe the fund, which
invests in companies of various sizes, is well positioned to take advantage of
a broad range of opportunities, and has the potential to deliver superior
long-term returns.
The views expressed here are exclusively those of Putnam Management. They are
not meant as investment advice. Although the described holdings were viewed
favorably as of 1/31/97, there is no guarantee the fund will continue to hold
these securities in the future. This fund invests a portion of its assets in
small and medium-sized companies. Such investments increase the risk of
greater price fluctuations.
Performance summary
Performance should always be considered in light of a fund's investment
strategy. Putnam Voyager Fund is designed for investors seeking aggressive
capital appreciation through common stocks.
This section provides, at a glance, information about your fund's performance.
Total return shows how the value of the fund's shares changed over time,
assuming you held the shares through the entire period and reinvested all
distributions in the fund.
TOTAL RETURN FOR PERIODS ENDED 1/31/97
Class A Class B Class M
(inception date) (4/1/69) (4/27/92) (12/1/94)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 14.18% 7.61% 13.72% 8.72% 13.91% 9.89%
- ------------------------------------------------------------------------------
1 year 16.62 9.91 15.71 10.71 15.99 11.90
- ------------------------------------------------------------------------------
5 years 115.38 103.07 -- -- -- --
Annual average 16.58 15.22 -- -- -- --
- -----------------------------------------------------------------------------
10 years 362.54 335.86 -- -- -- --
Annual average 16.55 15.86 -- -- -- --
- ------------------------------------------------------------------------------
Life of class -- -- 123.60 121.60 66.86 60.98
Annual average -- -- 18.38 18.15 26.61 24.54
- ------------------------------------------------------------------------------
COMPARATIVE INDEX RETURNS FOR PERIODS ENDED 1/31/97
Standard & Poors Consumer
500 Index Price Index
- ------------------------------------------------------------------------------
6 months 24.13% 1.34%
- ------------------------------------------------------------------------------
1 year 26.33 3.04
- ------------------------------------------------------------------------------
5 years 119.41 15.21
Annual average 17.01 2.87
- ------------------------------------------------------------------------------
10 years 287.63 43.08
Annual average 14.51 3.65
- ------------------------------------------------------------------------------
Life of class B 114.57 14.05
Annual average 17.41 2.79
- ------------------------------------------------------------------------------
Life of class M 82.31 6.28
Annual average 31.86 2.85
- ------------------------------------------------------------------------------
Performance data represent past results, do not reflect future performance,
and will differ for each share class. They do not take into account any
adjustment for taxes payable on reinvested distributions or, for class A
shares, distribution fees prior to implementation of the class A distribution
plan in 1990. Investment returns and principal value will fluctuate so that an
investor's shares, when sold, may be worth more or less than their original
cost. POP assumes 5.75% maximum sales charge for class A shares and 3.50% for
class M shares. CDSC for class B shares assumes the applicable sales charge,
with the maximum being 5%.
PRICE AND DISTRIBUTION INFORMATION
6 months ended 1/31/97
Class A Class B Class M
- ------------------------------------------------------------------------------
Distributions (number) 1 1 1
- ------------------------------------------------------------------------------
Income $-- $-- $--
- ------------------------------------------------------------------------------
Capital gains
- ------------------------------------------------------------------------------
Long-term 1.088 1.088 1.088
- ------------------------------------------------------------------------------
Short-term -- -- --
- ------------------------------------------------------------------------------
Total $1.088 $1.088 $1.088
- ------------------------------------------------------------------------------
Share value: NAV POP NAV NAV POP
- ------------------------------------------------------------------------------
7/31/96 $15.73 $16.69 $15.15 $15.60 $16.17
- ------------------------------------------------------------------------------
1/31/97 16.83 17.86 16.10 16.64 17.24
- ------------------------------------------------------------------------------
TOTAL RETURN FOR PERIODS ENDED 12/31/96
(most recent calendar quarter)
Class A Class B Class M
(inception date) (4/1/69) (4/27/92) (12/1/94)
NAV POP NAV CDSC NAV POP
- ------------------------------------------------------------------------------
6 months 0.89% -4.91% 0.50% -4.20% 0.60% -2.90%
- ------------------------------------------------------------------------------
1 year 12.80 6.32 11.94 6.94 12.21 8.28
- ------------------------------------------------------------------------------
5 years 106.29 94.51 -- -- -- --
Annual average 15.58 14.23 -- -- -- --
- ------------------------------------------------------------------------------
10 years 402.71 373.70 -- -- -- --
Annual average 17.52 16.83 -- -- -- --
- ------------------------------------------------------------------------------
Life of class -- -- 114.29 112.29 59.84 54.21
Annual average -- -- 17.69 17.45 25.16 23.03
- ------------------------------------------------------------------------------
TERMS AND DEFINITIONS
Class A shares are generally subject to an initial sales charge.
Class B shares may be subject to a sales charge upon redemption.
Class M shares have a lower initial sales charge and a higher 12b-1 fee than
class A shares and no sales charge on redemption.
Net asset value (NAV) is the value of all your fund's assets, minus any
liabilities, divided by the number of outstanding shares, not including any
initial or contingent deferred sales charge.
Public offering price (POP) is the price of a mutual fund share plus the
maximum sales charge levied at the time of purchase. POP performance figures
shown here assume the maximum 5.75% sales charge for class A shares and 3.50%
for class M shares.
Contingent deferred sales charge (CDSC) is a charge applied at the time of the
redemption of class B shares and assumes redemption at the end of the period.
Your fund's CDSC declines from a 5% maximum during the first year to 1% during
the sixth year. After the sixth year, the CDSC no longer applies.
COMPARATIVE BENCHMARKS
Consumer Price Index (CPI) is a commonly used measure of inflation; it does
not represent an investment return.
Standard & Poor's 500 Index is an unmanaged list of common stocks that is
frequently used as a general measure of stock market performance. The index
assumes reinvestment of all distributions and interest payments and does not
take in account brokerage fees or taxes. Securities in the fund do not match
those in the indexes and performance of the fund will differ. It is not
possible to invest directly in an index.
<TABLE>
<CAPTION>
Portfolio of investments owned
January 31, 1997 (Unaudited)
COMMON STOCKS (97.4%) *
NUMBER OF SHARES VALUE
Advertising (0.9%)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
673,221 Lamar Advertising Co. + $ 16,493,915
1,173,197 Omnicom Group, Inc. 57,046,704
1,003,314 Outdoor Systems, Inc. + 30,224,834
465,645 TMP Worldwide Inc. + 6,111,591
649,275 Universal Outdoor Holdings, Inc. + 18,179,700
--------------
128,056,744
Aerospace and Defense (0.8%)
- ---------------------------------------------------------------------------------------------------------
550,000 Boeing Co. 58,918,750
250,000 Lockheed Martin Corp. 23,000,000
428,400 Northrop Grumman Corp. 33,468,750
--------------
115,387,500
Alcoholic Beverages (0.9%)
- ---------------------------------------------------------------------------------------------------------
1,275,000 Anheuser-Busch Cos., Inc. 54,187,500
2,050,000 Seagram Co., Ltd. 81,231,250
--------------
135,418,750
Apparel (1.1%)
- ---------------------------------------------------------------------------------------------------------
2,026,125 Gucci Group (Italy) 141,322,218
375,220 Loehmann's Holdings, Inc. + 5,722,105
450,902 The Men's Wearhouse, Inc. + 12,005,266
--------------
159,049,589
Automotive (0.8%)
- ---------------------------------------------------------------------------------------------------------
1,625,000 Echlin, Inc. 48,953,125
1,750,000 Snap-On Inc. 65,187,500
--------------
114,140,625
Banks (3.4%)
- ---------------------------------------------------------------------------------------------------------
961,800 Banc One Corp. 43,641,675
600,000 Bank of Boston Corp. 42,750,000
1,200,000 BankAmerica Corp. 133,950,000
200,000 Barnett Banks, Inc. 8,800,000
1,400,000 Citicorp 162,925,000
930,000 NationsBank Corp. 100,440,000
384,800 Washington Mutual, Inc. 20,899,450
--------------
513,406,125
Basic Industrial Products (0.4%)
- ---------------------------------------------------------------------------------------------------------
1,250,000 General Signal Corp. 56,562,500
Broadcasting (1.9%)
- ---------------------------------------------------------------------------------------------------------
563,825 Chancellor Broadcasting Corp. Class A + 16,209,969
2,324,293 Clear Channel Communications, Inc. + 99,072,989
11,000 Cox Radio, Inc. Class A + 202,125
1,782,200 Evergreen Media Corp. Class A + 55,248,200
991,685 Heartland Wireless Communications, Inc. + 9,297,047
383,521 Jacor Communications, Inc. + 10,163,307
416,620 LIN Television Corp. + 18,175,048
165,540 SFX Broadcasting, Inc. Class A + 5,545,590
549,707 Sinclair Broadcast Group, Inc. Class A + 14,017,529
474,400 Univision Communications Inc. Class A + 17,078,400
2,015,000 Westwood One, Inc. + 37,277,500
218,600 Young Broadcasting Corp. Class A + 6,721,950
--------------
289,009,654
Building Products (0.3%)
- ---------------------------------------------------------------------------------------------------------
1,250,000 Masco Corp. 43,125,000
Business Services (5.2%)
- ---------------------------------------------------------------------------------------------------------
308,869 Abacus Direct Corp. + 7,798,942
616,545 Affiliated Computer Services, Inc. Class A + 16,184,306
2,425,123 Airgas, Inc. + 47,896,179
351,100 APAC Teleservices, Inc. + 13,780,675
1,375,024 Corestaff, Inc. + 31,625,552
4,776,045 Corporate Express, Inc. + 107,461,013
2,650,000 Deluxe Corp. 81,487,500
1,290,911 Gartner Group Inc. Class A + 44,213,702
687,263 Interim Services Inc. + 24,913,284
892,365 Interpublic Group of Cos., Inc. 44,060,522
1,553,500 Metromedia International Group, Inc. + 17,671,063
101,030 National Data Corp. 4,142,230
32,600 NOVA Corp. + 684,600
439,711 Paychex, Inc. 21,325,984
404,325 Pharmaceutical Product Development, Inc. + 11,725,425
492,300 Precision Response Corp. + 17,230,500
12,888,080 Rentokil Group Ord. PLC (United Kingdom) 94,721,047
450,000 Reuters Holdings PLC ADR (United Kingdom) 28,743,750
2,531,724 Robert Half International, Inc. + 108,864,132
886,900 Select Appointments Holdings PLC ADR
(United Kingdom) + 9,977,625
1,136,073 Serco Group PLC (United Kingdom) 12,442,508
72,700 Snyder Communications Inc. + 2,190,088
778,600 Teletech Holdings, Inc. + 22,190,100
--------------
771,330,727
Cable Television (0.4%)
- ---------------------------------------------------------------------------------------------------------
1,200,000 Tele-Comm Liberty Media Group, Inc. Class A + 22,800,000
3,200,000 Tele-Communications Inc. Class A + 42,600,000
--------------
65,400,000
Chemicals (1.9%)
- ---------------------------------------------------------------------------------------------------------
750,000 Air Products & Chemicals, Inc. 53,531,250
350,000 Betz Laboratories, Inc. 20,475,000
650,000 Great Lakes Chemical Corp. 28,031,250
1,200,000 Praxair, Inc. 55,650,000
1,175,000 Raychem Corp. 101,784,375
650,000 Witco Chemical Corp. 19,337,500
--------------
278,809,375
Computer Services (3.3%)
- ---------------------------------------------------------------------------------------------------------
2,521,938 America Online, Inc. + 92,996,464
419,200 CBT Group PLC ADR (Ireland) + 26,724,000
5,277,873 EMC Corp. + 199,899,440
1,320,186 First Data Corp. 47,526,696
737,331 IDT Corp. + 6,267,314
1,158,504 Keane, Inc. + 36,058,437
82,300 National TechTeam, Inc. + 2,139,800
550,000 NCR Corp. + 20,831,250
1,154,292 Sterling Commerce, Inc. + 39,101,642
86,100 Transaction Systems Architects, Inc. Class A + 2,292,413
1,820,519 Vanstar Corp. + 26,852,655
105,100 Whittman-Hart, Inc. + 2,128,275
--------------
502,818,386
Computer Software (9.0%)
- ---------------------------------------------------------------------------------------------------------
221,650 Arbor Software Corp. + 6,594,088
3,083,671 Baan Co., N.V. (Netherlands) + 139,921,572
1,856,742 BMC Software, Inc. + 80,536,184
352,000 CCC Information Services Group + 6,512,000
262,900 Citrix Systems, Inc. + 12,159,125
424,500 Clarify, Inc. + 15,282,000
485,460 Cognex Corp. + 9,284,423
4,926,266 Computer Associates Intl., Inc. 223,529,320
298,677 Documentum, Inc. + 9,781,672
2,448,324 Electronic Arts, Inc. + 78,040,328
1,120,624 Electronics for Imaging, Inc. + 103,937,876
278,845 Forte Software, Inc. + 10,212,698
682,300 Geoworks + 17,057,500
8,400 I2 Technologies, Inc. + 304,500
536,800 Legato Systems, Inc. + 13,151,600
757,350 McAfee Associates, Inc. + 44,115,638
466,094 Medic Computer Systems, Inc. + 18,061,143
1,012,208 Microsoft Corp. + 103,245,216
4,143,975 Parametric Technology Corp. + 239,314,556
1,032,500 PeopleSoft, Inc. + 56,271,250
292,720 Raptor Systems, Inc. + 5,890,990
1,451,750 Rational Software Corp. + 36,838,156
351,200 Scopus Technology, Inc. + 17,647,800
537,800 Security Dynamics Technologies, Inc. + 18,688,550
827,022 Synopsys, Inc. + 36,518,190
470,119 The Learning Co. Inc. + 5,935,252
878,200 Vantive Corp. + 27,004,650
253,976 Viasoft, Inc. + 13,143,258
--------------
1,348,979,535
Consumer Products (0.9%)
- ---------------------------------------------------------------------------------------------------------
1,350,000 Kimberly-Clark Corp. 131,625,000
Consumer Services (0.2%)
- ---------------------------------------------------------------------------------------------------------
597,971 Loewen Group, Inc. 21,377,463
500,000 Sabre Group Holdings Inc. + 13,437,500
--------------
34,814,963
Containers (0.1%)
- ---------------------------------------------------------------------------------------------------------
250,000 Temple Inland, Inc. 13,812,500
Cosmetics (0.2%)
- ---------------------------------------------------------------------------------------------------------
499,890 Douglas Holding AG (Germany) 17,229,174
717,900 Thermolase Corp. + 9,960,863
--------------
27,190,037
Data Communications (--%)
- ---------------------------------------------------------------------------------------------------------
66,700 Omnipoint Corp. + 1,492,413
Education Services (0.4%)
- ---------------------------------------------------------------------------------------------------------
559,372 Apollo Group, Inc. Class A + 18,599,119
889,822 DeVRY, Inc. + 23,357,828
408,300 Learning Tree International, Inc. + 15,923,700
336,140 Sylvan Learning Systems, Inc. + 9,916,130
--------------
67,796,777
Electric Utilities (0.3%)
- ---------------------------------------------------------------------------------------------------------
1,375,192 Calenergy, Inc. + 52,772,993
Electronics and Electrical Equipment (2.7%)
- ---------------------------------------------------------------------------------------------------------
2,100,000 ADT Ltd. + 46,987,500
2,279,715 Applied Materials, Inc. + 112,560,928
554,970 CHS Electronics, Inc. + 10,371,002
500,000 General Electric Co. 51,500,000
600,000 Hewlett-Packard Co. 31,575,000
630,200 Lernout & Hauspie Speech Products N.V. (Belgium) + 14,809,700
222,550 Microchip Technology, Inc. + 8,484,719
200,400 Rockwell International Corp. 13,176,300
448,700 Sipex Corp. + 13,797,525
396,784 Solectron Corp. + 23,906,236
1,469,480 Thermo Instrument Systems, Inc. + 49,227,580
1,365,093 Westinghouse Electric Corp. 25,083,584
--------------
401,480,074
Energy-Related (1.0%)
- ---------------------------------------------------------------------------------------------------------
4,493,355 Thermo Electron Corp. + 153,335,739
Entertainment (0.5%)
- ---------------------------------------------------------------------------------------------------------
1,051,208 Disney (Walt) Productions, Inc. 77,000,986
Environmental Control (1.6%)
- ---------------------------------------------------------------------------------------------------------
535,700 Memtec Ltd. ADR (Australia) 15,535,300
1,068,600 Pall Corp. 23,909,925
2,717,435 Republic Industries, Inc. + 113,792,591
773,589 U.S. Filter Corp. + 29,686,478
692,600 USA Waste Services, Inc. + 25,279,900
800,000 WMX Technologies, Inc. 29,300,000
--------------
237,504,194
Finance (4.1%)
- ---------------------------------------------------------------------------------------------------------
3,191,610 American Express Co. 199,076,674
4,905,832 Federal Home Loan Mortgage Corp. 148,401,418
4,293,410 Federal National Mortgage Association 169,589,695
744,150 Household International, Inc. 73,763,869
208,300 Student Loan Marketing Assn. 22,678,663
--------------
613,510,319
Financial Services (2.6%)
- ---------------------------------------------------------------------------------------------------------
221,567 Aames Financial Corp. 9,527,381
900,000 Associates First Capital Corp. 43,762,500
479,718 Concord EFS, Inc. + 9,594,360
876,056 Countrywide Credit Industries, Inc. 26,172,173
304,302 First USA Paymentech, Inc. + 10,156,079
6,037,403 MBNA Corp. 208,290,404
599,684 RAC Financial Group, Inc. + 19,789,572
553,644 Southern Pacific Funding Corp. + 11,972,552
1,160,050 TCF Financial Corp. 49,157,119
--------------
388,422,140
Food and Beverages (1.2%)
- ---------------------------------------------------------------------------------------------------------
2,837,500 Archer Daniels Midland Co. 56,040,625
1,300,000 PepsiCo, Inc. 45,337,500
1,350,000 Sara Lee Corp. 53,325,000
975,000 Whitman Corp. 22,425,000
--------------
177,128,125
Gas Pipelines (0.8%)
- ---------------------------------------------------------------------------------------------------------
361,000 El Paso Natural Gas Co. 19,448,875
1,057,700 Enron Corp. 43,630,125
1,000,000 Sonat, Inc. 53,250,000
--------------
116,329,000
Gas Utilities (0.7%)
- ---------------------------------------------------------------------------------------------------------
1,500,000 Columbia Gas System, Inc. 97,687,500
Health Care Information Systems (0.4%)
- ---------------------------------------------------------------------------------------------------------
991,420 HBO & Co. 62,087,678
Health Care Services (2.4%)
- ---------------------------------------------------------------------------------------------------------
370,800 ABR Information Services, Inc. + 16,268,850
263,298 Access Health, Inc. + 7,569,818
1,027,344 Cardinal Health, Inc. 64,337,418
209,800 Carematrix Corp. + 3,278,125
2,506,325 Healthsouth Rehabilitation Corp. + 109,338,428
775,572 Renal Treatment Centers, Inc. + 21,812,963
694,000 Rotech Medical Corp. + 11,971,500
545,700 Total Renal Care Holdings, Inc. + 19,986,263
1,579,418 United Healthcare Corp. 76,996,628
742,705 Vivra, Inc. + 22,652,503
--------------
354,212,496
Hospital Management (0.5%)
- ---------------------------------------------------------------------------------------------------------
2,383,797 Health Management Assoc., Inc. + 65,852,392
652,000 Physician Reliance Network, Inc. + 5,297,500
--------------
71,149,892
Household Products (0.9%)
- ---------------------------------------------------------------------------------------------------------
1,172,300 Blyth Industries, Inc. + 43,521,638
1,850,000 Tupperware Corp. 86,718,750
--------------
130,240,388
Insurance (1.6%)
- ---------------------------------------------------------------------------------------------------------
850,000 Aetna Inc. 67,150,000
1,450,000 American General Corp. 57,818,750
375,000 American International Group, Inc. 45,421,875
516,464 HCC Insurance Holdings, Inc. 14,396,434
500,000 ITT Hartford Group, Inc. + 36,687,500
1,000,000 USF&G Corp. 21,125,000
--------------
242,599,559
Leisure (0.3%)
- ---------------------------------------------------------------------------------------------------------
433,362 Adidas AG 144A (Germany) + 20,368,014
506,000 Family Golf Centers, Inc. + 13,598,750
92,400 Signature Resorts, Inc. + 3,384,150
--------------
37,350,914
Lodging (1.7%)
- ---------------------------------------------------------------------------------------------------------
678,100 Doubletree Corp. + 27,971,625
983,600 Extended Stay America, Inc. + 17,827,750
2,297,247 HFS, Inc. + 160,807,290
1,401,300 Prime Hospitality Corp. + 23,997,263
597,900 Promus Hotel Corp. + 19,506,488
86,500 Studio Plus Hotels, Inc. + 1,838,125
--------------
251,948,541
Medical Management Services (0.8%)
- ---------------------------------------------------------------------------------------------------------
105,200 NCS HealthCare, Inc. Class A + 3,563,650
391,300 OccuSystems, Inc. + 9,048,813
2,787,342 Phycor, Inc. + 97,905,388
248,600 Phymatrix, Inc. + 3,946,525
88,200 Physicians Resource Group, Inc. + 1,510,425
334,749 Sunrise Assisted Living, Inc. + 8,661,630
--------------
124,636,431
Medical Supplies and Devices (4.6%)
- ---------------------------------------------------------------------------------------------------------
127,800 American HomePatient, Inc. + 3,051,225
346,900 Bard (C.R.), Inc. 9,799,925
1,495,040 Boston Scientific Corp. + 102,036,480
250,900 Endosonics Corp. + 3,230,338
1,878,250 Johnson & Johnson 108,234,156
614,000 Lifecore Biomedical, Inc. + 11,052,000
200,000 Mallinckrodt, Inc. 8,200,000
1,073,567 Medtronic, Inc. 73,539,340
169,600 Minimed, Inc. + 5,808,800
241,300 Neuromedical Systems, Inc. + 2,684,463
821,444 Omnicare, Inc. 22,692,391
560,517 Physician Sales & Service, Inc. + 10,649,823
1,139,878 Shared Medical Systems Corp. 53,787,993
1,019,300 Sola International, Inc. + 37,586,688
328,383 Spine-Tech, Inc. + 7,142,330
4,627,087 Stryker Corp. 134,185,523
1,726,625 Thermo Cardiosystems, Inc. + 44,244,766
376,450 Thermotrex Corp. + 10,822,938
29,485 Trex Medical Corp. + 445,961
1,000,000 U.S. Surgical Corp. 40,125,000
--------------
689,320,140
Metals and Mining (0.4%)
- ---------------------------------------------------------------------------------------------------------
1,450,000 Freeport-McMoRan Copper & Gold Co., Inc. Class A 39,693,750
786,600 Miller Industries, Inc./Tennessee + 15,928,650
--------------
55,622,400
Networking Equipment (3.7%)
- ---------------------------------------------------------------------------------------------------------
1,117,169 Ascend Communications, Inc. + 77,782,892
2,746,328 Bay Networks Inc. + 59,732,634
207,142 Black Box Corp. + 7,767,825
5,280,082 Cabletron Systems, Inc. + 183,482,850
1,406,270 Cascade Communications Corp. + 55,899,233
2,316,049 Cisco Systems, Inc. + 161,544,418
--------------
546,209,852
Nursing Homes (0.2%)
- ---------------------------------------------------------------------------------------------------------
1,390,800 Health Care & Retirement Corp. + 35,986,950
Office Equipment (1.4%)
- ---------------------------------------------------------------------------------------------------------
704,200 BT Office Products International, Inc. + 7,218,050
842,718 Ikon Office Solutions, Inc. 37,184,932
3,758,563 Viking Office Products, Inc. + 104,300,123
950,000 Xerox Corp. 55,693,750
--------------
204,396,855
Oil and Gas (3.3%)
- ---------------------------------------------------------------------------------------------------------
406,207 British Petroleum PLC ADR (United Kingdom) 57,529,066
250,000 Exxon Corp. 25,906,250
1,025,000 Halliburton Co. 74,184,375
1,100,000 Mobil Corp. 144,375,000
480,000 Production Operators Corp. 23,280,000
575,000 Schlumberger Ltd. 63,896,875
2,548,900 Total Corp. ADR (France) + 109,921,313
--------------
499,092,879
Paper and Forest Products (0.6%)
- ---------------------------------------------------------------------------------------------------------
675,000 Fort Howard Corp. + 21,431,250
1,211,833 Unisource Worldwide, Inc. + 26,357,357
900,000 Weyerhaeuser Co. 40,950,000
--------------
88,738,607
Pharmaceuticals and Biotechnology (4.5%)
- ---------------------------------------------------------------------------------------------------------
650,000 Astra AB (Sweden) 30,980,990
758,398 Biochem Pharmaceutical, Inc. + 42,565,088
510,700 Dura Pharmaceuticals, Inc. + 21,449,400
1,010,422 Elan Corp. PLC ADR (Ireland) + 38,901,247
1,028,000 Gilead Sciences, Inc. + 33,538,500
748,619 IDEXX Laboratories, Inc. + 24,330,118
76,000 Jones Medical Industries, Inc. 2,888,000
900,000 Lilly (Eli) & Co. 78,412,500
372,000 Martek Biosciences Corp. + 9,114,000
623,695 Merck & Co., Inc. 56,600,321
304,172 Parexel International Corp. + 17,870,105
1,558,154 Pfizer, Inc. 144,713,553
2,625,151 Pharmacia & Upjohn, Inc. 97,786,875
750,500 Smithkline Beecham PLC ADR (United Kingdom) 54,223,625
173,800 Warner-Lambert Co. 13,990,900
--------------
667,365,222
Photography (1.4%)
- ---------------------------------------------------------------------------------------------------------
1,400,000 Eastman Kodak Co. 121,450,000
2,050,000 Polaroid Corp. 90,200,000
--------------
211,650,000
Publishing (1.8%)
- ---------------------------------------------------------------------------------------------------------
250,000 Gannett Co., Inc. 19,156,250
974,400 Harcourt General, Inc. 44,091,600
500,000 McGraw-Hill, Inc. 24,875,000
1,000,000 Tribune Co. 38,250,000
1,190,847 Wolters Kluwer N.V. (Netherlands) + 146,842,452
--------------
273,215,302
Railroads (0.7%)
- ---------------------------------------------------------------------------------------------------------
590,000 Burlington Northern Santa Fe Corp. 51,625,000
1,289,785 Wisconsin Central Transportation Corp. + 47,883,268
--------------
99,508,268
Restaurants (0.9%)
- ---------------------------------------------------------------------------------------------------------
1,091,077 Applebee's International, Inc. 29,459,079
887,174 Boston Chicken, Inc. + 30,718,400
1,882,564 J.D. Wetherspoon PLC (United Kingdom) 34,137,644
798,900 Landry's Seafood Restaurants, Inc. + 16,277,588
643,000 Papa Johns International, Inc. + 18,566,625
139,000 PizzaExpress PLC (United Kingdom) 1,270,856
--------------
130,430,192
Retail (7.0%)
- ---------------------------------------------------------------------------------------------------------
1,566,825 Bed Bath & Beyond, Inc. + 43,087,688
737,562 Boise Cascade Office Products + 16,871,731
3,713,630 CompUSA, Inc. + 76,129,415
1,900,000 Dayton-Hudson Corp. 71,487,500
5,916,349 Dixons Group PLC (United Kingdom) 48,976,744
1,550,000 Federated Department Stores Inc. + 50,956,250
373,800 Global DirectMail Corp. + 12,942,825
1,128,735 Kohls Corp. + 43,879,573
1,350,000 Lowe's Cos., Inc. 44,718,750
6,632,839 Officemax, Inc. + 79,594,068
1,100,000 Payless Shoesource, Inc. + 41,250,000
175,200 Payment Services., Inc. + 2,803,200
860,218 Petco Animal Supplies, Inc. + 20,967,814
5,947,062 Price/Costco, Inc. + 158,340,526
2,100,000 Revco D.S., Inc. + 78,750,000
1,450,000 Rite Aid Corp. 58,000,000
1,967,197 Staples, Inc. + 40,327,539
4,200,332 Starbucks Corp. + 143,861,371
347,501 Wolverine World Wide, Inc. 10,729,093
--------------
1,043,674,087
Satellite Services (0.4%)
- ---------------------------------------------------------------------------------------------------------
1,787,000 PanAmSat Corp. + 52,716,500
Semiconductors (3.8%)
- ---------------------------------------------------------------------------------------------------------
374,091 Actel Corp. + 7,668,866
2,386,217 Analog Devices Inc. + 68,902,016
381,999 Lattice Semiconductor Corp. 19,816,198
1,976,189 Linear Technology Corp. 96,339,214
2,749,831 Maxim Integrated Products Inc. + 154,677,994
2,246,560 National Semiconductor Corp. + 62,342,040
828,778 SGS-Thomson Microelectronics ADR (France) + 58,636,044
700,000 Texas Instruments, Inc. 54,862,500
863,363 Xilinx, Inc. + 39,283,017
--------------
562,527,889
Specialty Consumer Products (0.4%)
- ---------------------------------------------------------------------------------------------------------
405,033 Central Garden and Pet Co. + 10,935,891
804,000 Fastenal Co. 30,351,000
198,198 Luxottica Group S.P.A. ADR (Italy) 11,148,638
238,300 Marks Brothers Jewelers, Inc. + 2,561,725
--------------
54,997,254
Steel (0.1%)
- ---------------------------------------------------------------------------------------------------------
250,000 Nucor Corp. 13,000,000
Supermarkets (0.3%)
- ---------------------------------------------------------------------------------------------------------
76,000 Carrefour Supermarche SA (France) + 45,573,917
Telecommunication Equipment (1.3%)
- ---------------------------------------------------------------------------------------------------------
352,700 Brooks Fiber Properties, Inc. + 9,037,938
1,213,200 Pairgain Technologies, Inc. + 49,665,375
1,641,897 Picturetel Corp. + 30,375,095
2,361,689 Tellabs, Inc. + 97,272,066
77,800 West TeleServices Corp. + 1,789,400
--------------
188,139,874
Telephone Services (2.3%)
- ---------------------------------------------------------------------------------------------------------
84,000 Deutsche Telekom AG ADR (Germany) + 1,564,500
1,200,000 GTE Corp. 56,400,000
249,800 Intermedia Communications, Inc. + 5,932,750
406,196 IXC Communications, Inc. + 13,607,566
327,628 LCI International, Inc. + 7,371,630
1,875,000 MCI Communications Corp. 65,859,375
1,321,600 McLeod, Inc. Class A + 30,396,800
89,900 Natural Microsystems Corp. + 3,101,550
1,700,000 Sprint Corp. 69,275,000
994,080 Tel-Save Holdings, Inc. + 12,705,585
3,272,368 WorldCom, Inc. + 82,218,246
--------------
348,433,002
Textiles (0.4%)
- ---------------------------------------------------------------------------------------------------------
703,772 Nautica Enterprises, Inc. + 16,538,642
783,800 St. John Knits, Inc. 35,662,900
--------------
52,201,542
Tobacco (0.3%)
- ---------------------------------------------------------------------------------------------------------
1,550,000 UST, Inc. 47,662,500
Trucking (0.2%)
- ---------------------------------------------------------------------------------------------------------
1,300,000 Ryder System, Inc. 37,050,000
Wireless Communications (1.2%)
- ---------------------------------------------------------------------------------------------------------
1,300,000 Airtouch Communications, Inc. + 33,637,500
450,395 CellNet Data Systems Inc. + 5,967,734
558,080 Clearnet Communications Inc. Class A (Canada) + 7,115,520
438,080 ICG Communications, Inc. + 7,556,880
5,662,166 NEXTEL Communications, Inc. Class A + 87,055,802
2,051,719 Paging Network, Inc. + 29,878,144
717,100 Preferred Networks, Inc. + 4,661,150
--------------
175,872,730
--------------
Total Common Stocks (cost $11,051,113,452) $14,511,009,131
PREFERRED STOCKS (0.2%) *(cost $29,134,961)
NUMBER OF SHARES VALUE
- ---------------------------------------------------------------------------------------------------------
158,810 Fresenius Medical Care Ser. D $9.00 trust pfd. $31,872,439
CONVERTIBLE BONDS AND NOTES (0.1%) *(cost $8,241,000)
PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------
$ 8,000,000 Signature Resorts, Inc. cv. sub. notes 5 3/4s, 2007 $8,250,000
CONVERTIBLE PREFERRED STOCKS (--%) * (cost $1,355,000)
NUMBER OF SHARES VALUE
- ---------------------------------------------------------------------------------------------------------
27,100 Vanstar Corp. 144A $3.375 cv. pfd. $1,107,713
SHORT-TERM INVESTMENTS (2.5%) *
PRINCIPAL AMOUNT VALUE
- ---------------------------------------------------------------------------------------------------------
20,000,000 Acquisition Hldg. Co. effective yield of 5.32%,
March 10, 1997 $ 19,890,645
25,000,000 Banc One Corp. effective yield of 5.30%,
February 25, 1997 24,911,667
25,000,000 Corporate Receivables Corp. effective yield of 5.37%,
April 4, 1997 24,746,889
30,000,000 Delaware Funding Corp. effective yield of 5.33%,
February 3, 1997 29,991,116
25,000,000 Falcon Asset Securitization Corp. effective yield of 5.34%,
April 22, 1997 24,702,222
25,000,000 Falcon Asset Securitization Corp. effective yield of 5.32%,
February 5, 1997 24,985,222
25,000,000 Federal Home Loan Mortgage Corp. effective yield of 5.23%,
February 13, 1997 24,956,417
10,000,000 Federal Home Loan Mortgage Corp. effective yield of 5.22%,
March 3, 1997 9,956,500
20,000,000 Federal National Mortgage Assn. effective yield of 5.40%,
February 4, 1997 19,991,000
6,000,000 Federal National Mortgage Assn. effective yield of 5.15%,
March 27,1997 5,953,650
25,000,000 General Electric Capital Corp. effective yield of 5.38%,
March 31, 1997 24,783,306
25,000,000 IBM Credit Corp. effective yield of 5.31%,
March 19, 1997 24,837,750
25,000,000 Merrill Lynch & Co Inc. effective yield of 5.32%,
February 12, 1997 24,959,361
30,000,000 Sears Roebuck Acceptance Corp. effective yield of 5.32%,
February 19,1997 29,920,200
54,644,000 Interest in $667,115,000 joint repurchase agreement
dated January 31, 1997 with UBS Securities due
February 2, 1997 with respect to various
U.S. Treasury obligations -- maturity value
of $54,669,318 for an effective yield of 5.56% 54,652,439
--------------
Total Short-Term Investments (cost $369,238,384) $ 369,238,384
- ---------------------------------------------------------------------------------------------------------
Total Investments (cost $11,459,082,797) *** $14,921,477,667
- ---------------------------------------------------------------------------------------------------------
* Percentages indicated are based on net assets of $14,904,290,156.
*** The aggregate identified cost on a tax basis is $11,478,361,808, resulting in gross unrealized
appreciation and depreciation of $3,916,092,486 and $472,976,627 respectively, or net unrealized
appreciation of $3,443,115,859.
+ Non-income-producing security.
144A after the name of a security represents those exempt from registration under Rule 144A of
the Securities Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
ADR after the name of a foreign holding stands for American Depository Receipts representing
ownership of foreign securities on deposit with a domestic custodian bank.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of assets and liabilities
January 31, 1997 (Unaudited)
<S> <C>
Assets
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value
(identified cost $11,459,082,797) (Note 1) $14,921,477,667
- ---------------------------------------------------------------------------------------------------
Cash 3,120,169
- ---------------------------------------------------------------------------------------------------
Dividends and interest receivable 6,415,948
- ---------------------------------------------------------------------------------------------------
Receivable for shares of the fund sold 48,250,079
- ---------------------------------------------------------------------------------------------------
Receivable for securities sold 105,274,075
- ---------------------------------------------------------------------------------------------------
Total assets 15,084,537,938
Liabilities
- ---------------------------------------------------------------------------------------------------
Payable for securities purchased 127,796,700
- ---------------------------------------------------------------------------------------------------
Payable for shares of the fund repurchased 21,191,563
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Manager (Note 2) 17,671,419
- ---------------------------------------------------------------------------------------------------
Payable for investor servicing and custodian fees (Note 2) 4,278,330
- ---------------------------------------------------------------------------------------------------
Payable for compensation of Trustees (Note 2) 54,956
- ---------------------------------------------------------------------------------------------------
Payable for administrative services (Note 2) 20,335
- ---------------------------------------------------------------------------------------------------
Payable for distribution fees (Note 2) 5,798,497
- ---------------------------------------------------------------------------------------------------
Other accrued expenses 3,435,982
- ---------------------------------------------------------------------------------------------------
Total liabilities 180,247,782
- ---------------------------------------------------------------------------------------------------
Net Assets $14,904,290,156
Represented by
- ---------------------------------------------------------------------------------------------------
Paid-in capital (Notes 1 and 4) $11,336,860,923
- ---------------------------------------------------------------------------------------------------
Accumulated net investment loss (Note 1) (22,805,836)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments (Note 1) 127,840,199
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 3,462,394,870
- ---------------------------------------------------------------------------------------------------
Total -- Representing net assets applicable to
capital shares outstanding $14,904,290,156
Computation of net asset value and offering price
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class A share
($9,202,684,089 divided by 546,672,712 shares) $16.83
- ---------------------------------------------------------------------------------------------------
Offering price per class A share (100/94.25 of $16.83)* $17.86
- ---------------------------------------------------------------------------------------------------
Net asset value and offering price per class B share
($4,599,364,339 divided by 285,609,361 shares)** $16.10
- ---------------------------------------------------------------------------------------------------
Net asset value and redemption price per class M share
($143,131,825 divided by 8,600,304 shares) $16.64
- ---------------------------------------------------------------------------------------------------
Offering price per class M share (100/96.50 of $16.64)* $17.24
- ---------------------------------------------------------------------------------------------------
Net asset value, offering price and redemption price per class Y share
($959,109,903 divided by 56,438,979 shares) $16.99
- ---------------------------------------------------------------------------------------------------
* On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the
offering price is reduced.
** Redemption price per share is equal to net asset value less any applicable contingent deferred
sales charge.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of operations
Six months ended January 31, 1997 (Unaudited)
<S> <C>
Investment income:
- --------------------------------------------------------------------------------------------------
Dividends (net of foreign tax of $90,627) $ 49,588,577
- --------------------------------------------------------------------------------------------------
Interest 11,753,395
- --------------------------------------------------------------------------------------------------
Total investment income 61,341,972
- --------------------------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------------------------
Compensation of Manager (Note 2) 33,886,725
- --------------------------------------------------------------------------------------------------
Investor servicing and custodian fees (Note 2) 14,528,242
- --------------------------------------------------------------------------------------------------
Compensation of Trustees (Note 2) 165,004
- --------------------------------------------------------------------------------------------------
Administrative services (Note 2) 30,434
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class A (Note 2) 10,644,832
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class B (Note 2) 20,620,998
- --------------------------------------------------------------------------------------------------
Distribution fees -- Class M (Note 2) 440,227
- --------------------------------------------------------------------------------------------------
Reports to shareholders 688,922
- --------------------------------------------------------------------------------------------------
Registration fees 922,740
- --------------------------------------------------------------------------------------------------
Auditing 70,370
- --------------------------------------------------------------------------------------------------
Legal 83,176
- --------------------------------------------------------------------------------------------------
Postage 3,068,360
- --------------------------------------------------------------------------------------------------
Other 553,363
- --------------------------------------------------------------------------------------------------
Total expenses 85,703,393
- --------------------------------------------------------------------------------------------------
Expense reduction (Note 2) (1,555,585)
- --------------------------------------------------------------------------------------------------
Net expenses 84,147,808
- --------------------------------------------------------------------------------------------------
Net investment loss (22,805,836)
- --------------------------------------------------------------------------------------------------
Net realized gain on investments (Notes 1 and 3) 246,539,572
- --------------------------------------------------------------------------------------------------
Net unrealized depreciation of assets and liabilities in
foreign currencies during the period (8,750)
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments during the period 1,477,853,283
- --------------------------------------------------------------------------------------------------
Net gain on investments 1,724,384,105
- --------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $1,701,578,269
- --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of changes in net assets
Six months ended Year ended
January 31 July 31
1997* 1996
------------------------------------------
Increase in net assets
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment loss $ (22,805,836) $ (28,749,167)
- ----------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 246,539,572 962,821,663
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and
assets and liabilities in foreign currencies 1,477,844,533 144,557,473
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 1,701,578,269 1,078,629,969
- ----------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
- ----------------------------------------------------------------------------------------------------------------------
From net realized gain on investments
Class A (548,605,537) (317,069,690)
- ----------------------------------------------------------------------------------------------------------------------
Class B (281,238,919) (135,078,052)
- ----------------------------------------------------------------------------------------------------------------------
Class M (8,171,341) (2,101,620)
- ----------------------------------------------------------------------------------------------------------------------
Class Y (52,119,075) (22,695,086)
- ----------------------------------------------------------------------------------------------------------------------
Increase from capital share transactions (Note 4) 2,557,902,760 3,796,887,582
- ----------------------------------------------------------------------------------------------------------------------
Total increase in net assets 3,369,346,157 4,398,573,103
- ----------------------------------------------------------------------------------------------------------------------
Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Beginning of period 11,534,943,999 7,136,370,896
- ----------------------------------------------------------------------------------------------------------------------
End of period (including accumulated
net investment loss of $22,805,836
and $--, respectively) $14,904,290,156 $11,534,943,999
- ----------------------------------------------------------------------------------------------------------------------
* Unaudited
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial highlights
(For a share outstanding throughout the period)
Six months December 1, 1994
ended Year (commencement
January 31 ended of operations) to
(unaudited) July 31 July 31
-------------------------------------------------------------------
1997 1996 1995
-------------------------------------------------------------------
Class M
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $15.60 $14.37 $11.79
- ------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.05)(d) (.09)(d) (.01)
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 2.18 2.18 3.10
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.13 2.09 3.09
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.09) (.86) (.51)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.64 $15.60 $14.37
- ------------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 13.91* 14.97 27.42*
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $143,132 $87,782 $19,004
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .77* 1.50 1.06*
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.31)* (.57) (.24)*
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 29.89* 57.92 65.43
- ------------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (c) $.0543
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Six months
ended
January 31
(unaudited) Year ended July 31
--------------------------------------------------------------------------
1997 1996 1995
--------------------------------------------------------------------------
Class Y
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $15.85 $14.48 $11.22
- -------------------------------------------------------------------------------------------------------------------------------
Investment operations
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .01(d) .02(d) .03
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 2.22 2.21 3.74
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 2.23 2.23 3.77
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (1.09) (.86) (.51)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.09) (.86) (.51)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.99 $15.85 $14.48
- -------------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 14.32* 15.85 34.90
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $959,110 $709,595 $351,817
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .40* .77 .83
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) .06* .15 .39
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 29.89* 57.92 65.43
- -------------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (c) $.0543
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
March 31, 1994 Six months
(commencement ended
of operations) to January 31 Year ended
July 31 (unaudited) July 31
------------------------------------------------------------------------
1994 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------
Class Y Class B
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $11.24 $15.15 $14.01
- ----------------------------------------------------------------------------------------------------------------------------
Investment operations
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) -- (.07)(d) (.13)(d)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (.02) 2.11 2.13
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations (.02) 2.04 2.00
- ----------------------------------------------------------------------------------------------------------------------------
Less distributions from:
- ----------------------------------------------------------------------------------------------------------------------------
Net investment income -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments -- (1.09) (.86)
- ----------------------------------------------------------------------------------------------------------------------------
Total distributions -- (1.09) (.86)
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.22 $16.10 $15.15
- ----------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) (0.18)* 13.72* 14.70
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $82,102 $4,599,364 $3,405,318
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .31* .90* 1.78
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.05)* (.43)* (.85)
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 57.74 29.89* 57.92
- ----------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (c) $.0543
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Year ended July 31
----------------------------------------------------------------
1995 1994 1993
----------------------------------------------------------------
Class B
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $10.97 $10.89 $9.63
- ------------------------------------------------------------------------------------------------------------------------------
Investment operations
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.06) (.05) (.03)
- ------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 3.61 .59 1.81
- ------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.55 .54 1.78
- ------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (.51) (.46) (.52)
- ------------------------------------------------------------------------------------------------------------------------------
Total distributions (.51) (.46) (.52)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.01 $10.97 $10.89
- ------------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 33.65 4.71 18.79
- ------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,870,370 $911,069 $408,361
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.82 1.84 1.87
- ------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.58) (.91) (.91)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 65.43 57.74 64.62
- --------------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (c)
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
See page 29 for Notes to Financial Highlights
Financial highlights (continued)
(For a share outstanding throughout the period)
April 27, 1992 Six months
(commencement ended Year
of operations) to January 31 ended
July 31 (unaudited) July 31
----------------------------------------------------------------
1992 1997 1996
----------------------------------------------------------------
Class B Class A
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $9.34 $15.73 $14.42
- -------------------------------------------------------------------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.04)(d) (.01)(d) (.02)(d)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments .33 2.20 2.19
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations .29 2.19 2.17
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions from: .00
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments -- (1.09) (.86)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (1.09) (.86)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.63 $16.83 $15.73
- -------------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 3.11* 14.18* 15.49
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $42,492 $9,202,684 $7,332,248
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) .63* .52* 1.03
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (.39)* (.06)* (.10)
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 44.17 29.89* 57.92
- -------------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (c) $.0543
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Year ended July 31
---------------------------------------------------------------
1995 1994 1993
---------------------------------------------------------------
Class A
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $11.19 $11.02 $9.67
- -------------------------------------------------------------------------------------------------------------------------------
Investment operations
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .02 (.02) (.02)
- -------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 3.72 .65 1.89
- -------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.74 .63 1.87
- -------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (.51) (.46) (.52)
- -------------------------------------------------------------------------------------------------------------------------------
Total distributions (.51) (.46) (.52)
- -------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.42 $11.19 $11.02
- -------------------------------------------------------------------------------------------------------------------------------
Total investment return at net asset value (%)(a) 34.72 5.49 19.69
- -------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $4,895,180 $3,051,878 $2,403,332
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.07 1.10 1.12
- -------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) .17 (.18) (.14)
- -------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover (%) 65.43 57.74 64.62
- -------------------------------------------------------------------------------------------------------------------------------
Average commission rate paid (c)
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Financial highlights (continued)
(For a share outstanding throughout the period)
Year ended
July 31
-------------------------
1992
-------------------------
<S> <C>
Net asset value, beginning of period $9.00
- --------------------------------------------------------------------
Investment operations
- --------------------------------------------------------------------
Net investment income (loss) .02
- --------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 1.16
- --------------------------------------------------------------------
Total from investment operations 1.18
- --------------------------------------------------------------------
Less distributions from:
- --------------------------------------------------------------------
Net investment income (.03)
- --------------------------------------------------------------------
Net realized gain on investments (.48)
- --------------------------------------------------------------------
Total distributions (.51)
- --------------------------------------------------------------------
Net asset value, end of period $9.67
- --------------------------------------------------------------------
Total investment return at net asset value (%)(a) 13.39
- --------------------------------------------------------------------
Net assets, end of period (in thousands) $1,549,128
- --------------------------------------------------------------------
Ratio of expenses to average net assets (%)(b) 1.20
- --------------------------------------------------------------------
Ratio of net investment income (loss) to average
net assets (%) .27
- --------------------------------------------------------------------
Portfolio turnover (%) 44.17
- --------------------------------------------------------------------
Average commission rate paid (c)
- --------------------------------------------------------------------
* Not annualized.
(a) Total investment return assumes dividend reinvestment
and does not reflect the effect of sales charges.
(b) The ratio of expenses to average net assets for the period ended July 31, 1996
and thereafter, includes amounts paid through brokerage services and expense
offset arrangements. Prior period ratios exclude these amounts (Note 2).
(c) Average commission rate paid on security trades is requried for fiscal
periods beginning on or after september 1, 1995.
(d) Per share net investment income (loss) has been determined on the basis of
weighted average number of shares outstanding during the period.
</TABLE>
Notes to financial statements
January 31, 1997 (Unaudited)
Note 1
Significant accounting policies
The fund is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management investment company. The fund invests
primarily in common stocks of companies that Putnam Investment Management,
Inc. ("Putnam Management"), the fund's Manager, a wholly-owned subsidiary of
Putnam Investments, Inc., believes have potential for capital appreciation
significantly greater than that of the market averages.
The fund offers class A, class B, class Y and class M shares. Class A shares
are sold with a maximum front-end sales charge of 5.75%. Class B shares, which
convert to class A shares after eight years, do not pay a front-end sales
charge but pay a higher ongoing distribution fee than class A shares, and may
be subject to a contingent deferred sales charge, if those shares are redeemed
within six years of purchase. Class M shares are sold with a maximum front end
sales charge of 3.50% and pay an ongoing distribution fee that is higher than
class A shares but lower than class B shares. Class Y shares, which are sold
at net asset value, are generally subject to the same expenses as class A,
class B and class M shares, but do not bear a distribution fee. Class Y shares
are sold to defined contribution plans that invest at least $250 million in a
combination of Putnam Funds and other accounts managed by affiliates of Putnam
Management.
Expenses of the fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including
the distribution fees applicable to such class). Each class votes as a class
only with respect to its own distribution plan or other matters on which a
class vote is required by law or determined by the Trustees. Shares of each
class would receive their pro-rata share of the net assets of the fund, if
that fund were liquidated. In addition, the Trustees declare separate
dividends on each class of shares.
The following is a summary of significant accounting policies followed by the
fund in the preparation of its financial statements. The preparation of
financial statements is in conformity with generally accepted accounting
principles and requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities. Actual results could
differ from those estimates.
A) Security valuation Investments for which market quotations are readily
available are stated at market value, which is determined using the last
reported sale price, or, if no sales are reported--as in the case of some
securities traded over the counter--the last reported bid price. Short-term
investments having remaining maturities of 60 days or less are stated at
amortized cost, which approximates market value, and other investments are
stated at fair value following procedures approved by the Trustees.
B) Joint trading account Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the fund may transfer uninvested cash
balances into a joint trading account along with the cash of other registered
investment companies and certain other accounts managed by Putnam Management.
These balances may be invested in one or more repurchase agreements and/or
short-term money market instruments.
C) Repurchase agreements The fund, or any joint trading account, through its
custodian, receives delivery of the underlying securities, the market value of
which at the time of purchase is required to be in an amount at least equal to
the resale price, including accrued interest. Putnam Management is responsible
for determining that the value of these underlying securities is at all times
at least equal to the resale price, including accrued interest.
D) Security transactions and related investment income Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed).
Interest income is recorded on the accrual basis. Dividend income is recorded
on the ex-dividend date except that certain dividends from foreign securities
are recorded as soon as the fund is informed of the ex-dividend date.
E) Federal taxes It is the policy of the fund to distribute all of its taxable
income within the prescribed time and otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies. It is
also the intention of the fund to distribute an amount sufficient to avoid
imposition of any excise tax under Section 4982 of the Internal Revenue Code
of 1986. Therefore, no provision has been made for federal taxes on income,
capital gains or unrealized appreciation on securities held nor for excise tax
on income and capital gains.
F) Distributions to shareholders Distributions to shareholders from net
investment income are recorded by the fund on the ex-dividend date. Capital
gain distributions, if any, are recorded on the ex-dividend date and paid
annually. The amount and character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. Reclassifications are made to the
fund's capital accounts to reflect income and gains available for distribution
(or available capital loss carryovers) under income tax regulations.
Note 2
Management fee, administrative services and other transactions
Compensation of Putnam Management, for management and investment advisory
services is paid quarterly based on the average net assets of the fund for the
quarter. Such fee is based on the following annual rates: 0.70% of the first
$500 million of average net assets, 0.60% of the next $500 million, 0.55% of
the next $500 million, 0.50% of the next $5 billion, 0.475% of the next $5
billion, 0.455% of the next $5 billion, 0.44% of the next $5 billion, and
0.43% of any amount over $21.5 billion.
The fund reimburses Putnam Management for the compensation and related
expenses of certain officers of the fund and their staff who provide
administrative services to the fund. The aggregate amount of all such
reimbursements is determined annually by the Trustees.
Custodial functions for the fund's assets are provided by Putnam Fiduciary
Trust Company (PFTC), a wholly-owned subsidiary of Putnam Investments, Inc.
Investor servicing agent functions are provided by Putnam Investor Services, a
division of PFTC.
For the six months ended January 31, 1997, fund expenses were reduced by
$1,555,585 under expense offset arrangements with PFTC and brokerage service
arrangements. Investor servicing and custodian fees reported in the Statement
of operations exclude these credits. The fund could have invested a portion of
the assets utilized in connection with the expense offset arrangements in an
income producing asset if it had not entered into such arrangements.
Trustees of the fund receive an annual Trustees fee of $13,050 and an
additional fee for each Trustee's meeting attended. Trustees who are not
interested persons of Putnam Management and who serve on committees of the
Trustees receive additional fees for attendance at certain committee meetings.
The fund has adopted a Trustee Fee Deferral Plan (the "Plan") which allows the
Trustees to defer the receipt of all or a portion of Trustees Fees payable on
or after July 1, 1995. The deferred fees remain in the fund and are invested
in the fund or in other Putnam funds until distribution in accordance with the
Plan.
The fund has adopted an unfunded noncontributory defined benefit pension plan
(the "Pension Plan") covering all Trustees of the fund who have served as
Trustee for at least five years. Benefits under the Pension Plan are equal to
50% of the Trustee's average total retainer and meeting fees for the three
years preceding retirement. Pension expense for the fund is included in
Compensation of Trustees in the Statement of operations. Accrued pension
liability is included in Payable for compensation of Trustees in the Statement
of assets and liabilities.
The fund has adopted distribution plans (the "Plans") with respect to its
class A, class B and class M shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The purpose of the Plans is to compensate
Putnam Mutual Funds Corp., a wholly-owned subsidiary of Putnam Investments,
Inc., for services provided and expenses incurred by it in distributing shares
of the fund. The Plans provide for payments by the fund to Putnam Mutual Funds
Corp. at an annual rate up to 0.35%, 1.00% and 1.00% of the average net assets
attributable to class A, class B and class M shares, respectively. The
Trustees have approved payment by the fund at an annual rate of 0.25%, 1.00%
and 0.75% of the average net assets attributable to class A, class B and class
M shares, respectively.
For the six months ended January 31, 1997, Putnam Mutual Funds Corp., acting
as underwriter received net commissions of $3,915,087 and $100,671 from the
sale of class A and class M shares, respectively and received $2,529,858 in
contingent deferred sales charges from redemptions of class B shares. A
deferred sales charge of up to 1% is assessed on certain redemptions of class
A shares. For the six months ended January 31, 1997, Putnam Mutual Funds
Corp., acting as underwriter received $119,799 on class A redemptions.
Note 3
Purchases and sales of securities
During the six months ended January 31, 1997, purchases and sales of
investment securities other than short-term investments aggregated
$5,634,657,919 and $3,880,038,755, respectively. There were no purchases and
sales of U.S. government obligations. In determining the net gain or loss on
securities sold, the cost of securities has been determined on the identified
cost basis.
Note 4
Capital shares
At January 31, 1997, there was an unlimited number of shares of beneficial
interest authorized. Transactions in capital shares were as follows:
Six months ended
January 31, 1997
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 114,246,057 $1,931,723,478
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 32,563,055 527,847,147
- ------------------------------------------------------------
146,809,112 2,459,570,625
Shares
repurchased (66,291,055) (1,119,255,958)
- ------------------------------------------------------------
Net increase 80,518,057 $1,340,314,667
- ------------------------------------------------------------
Year ended
July 31, 1996
- ------------------------------------------------------------
Class A Shares Amount
- ------------------------------------------------------------
Shares sold 195,466,332 $3,099,427,469
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 20,779,804 304,214,751
- ------------------------------------------------------------
216,246,136 3,403,642,220
Shares
repurchased (89,666,684) (1,411,912,865)
- ------------------------------------------------------------
Net increase 126,579,452 $1,991,729,355
- ------------------------------------------------------------
Six months ended
January 31, 1997
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 60,475,495 $985,044,916
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 16,881,729 262,003,859
- ------------------------------------------------------------
77,357,224 1,247,048,775
Shares
repurchased (16,581,328) (270,101,233)
- ------------------------------------------------------------
Net increase 60,775,896 $976,947,542
- ------------------------------------------------------------
Year ended
July 31, 1996
- ------------------------------------------------------------
Class B Shares Amount
- ------------------------------------------------------------
Shares sold 107,598,758 $1,654,943,119
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 8,896,693 125,976,810
- ------------------------------------------------------------
116,495,451 1,780,919,929
Shares
repurchased (25,142,718) (384,623,376)
- ------------------------------------------------------------
Net increase 91,352,733 $1,396,296,553
- ------------------------------------------------------------
Six months ended
January 31, 1997
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 3,337,454 $56,257,061
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 474,248 7,602,194
- ------------------------------------------------------------
3,811,702 63,859,255
Shares
repurchased (837,759) (14,037,303)
- ------------------------------------------------------------
Net increase 2,973,943 $49,821,952
- ------------------------------------------------------------
Year ended
July 31, 1996
- ------------------------------------------------------------
Class M Shares Amount
- ------------------------------------------------------------
Shares sold 4,921,187 $77,977,369
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 137,798 2,007,717
- ------------------------------------------------------------
5,058,985 79,985,086
Shares
repurchased (754,954) (11,970,795)
- ------------------------------------------------------------
Net increase 4,304,031 $68,014,291
- ------------------------------------------------------------
Six months ended
January 31, 1997
- ------------------------------------------------------------
Class Y Shares Amount
- ------------------------------------------------------------
Shares sold 15,154,938 $252,916,807
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 3,185,764 52,119,075
- ------------------------------------------------------------
18,340,702 305,035,882
Shares
repurchased (6,672,943) (114,217,283)
- ------------------------------------------------------------
Net increase 11,667,759 $190,818,599
- ------------------------------------------------------------
Year ended
July 31, 1996
- ------------------------------------------------------------
Class Y Shares Amount
- ------------------------------------------------------------
Shares sold 24,769,497 $410,764,510
- ------------------------------------------------------------
Shares issued in
connection with
reinvestment of
distributions 1,540,741 22,695,086
- ------------------------------------------------------------
26,310,238 433,459,596
Shares
repurchased (5,830,909) (92,612,213)
- ------------------------------------------------------------
Net increase 20,479,329 $340,847,383
- ------------------------------------------------------------
Note 5
Transactions with Affiliated Companies
Transactions during the period with companies in which the fund owns at least
5% of the voting securities were as follows:
<TABLE>
<CAPTION>
Purchase Sales Dividend Market
Affiliates cost cost Income Value
- ------------------------------------------------------------------------------------------------
Name of affiliate
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fulcrum Technologies $ -- $8,893,294 $ -- $ --
Lifecore Biomedical Inc. 256,375 -- -- 11,052,000
Preferred Networks Inc. -- 117,450 -- 4,661,150
Western Wireless Corp. Cl. -- 16,848,605 -- --
Westwood One Inc. 2,811,800 -- -- 37,277,500
Chancellor Broadcasting Cl. 3,370,439 -- -- 16,209,969
Evergreen Media Corp. 43,316,005 -- -- 55,248,200
Sipex Corp. 10,765,425 -- -- 13,797,525
Starbucks Corp. 42,328,759 -- -- 143,861,371
Petco Animal Supplies Inc. -- -- -- 20,967,814
- ------------------------------------------------------------------------------------------------
Totals $102,848,803 $25,859,349 $ -- $303,075,529
</TABLE>
Results of February 6, 1997 shareholder meeting
(Unaudited)
An annual meeting of shareholders of the fund was held on February 6, 1997.
At the meeting, each of the nominees for Trustees was elected, as follows:
Votes
Votes for withheld
Jameson Adkins Baxter 428,486,176 23,185,214
Hans H. Estin 428,642,836 23,028,554
John A. Hill 428,798,989 22,872,401
R.J. Jackson 428,673,444 22,997,946
Elizabeth T. Kennan 428,117,233 23,554,157
Lawrence J. Lasser 428,871,481 22,799,909
Robert E. Patterson 428,912,852 22,758,538
Donald S. Perkins 428,495,702 23,175,688
William F. Pounds 428,721,965 22,949,425
George Putnam 428,557,970 23,113,420
George Putnam, III 428,496,177 23,175,213
Eli Shapiro 426,347,847 25,323,543
A.J.C. Smith 428,759,484 22,911,906
W. Nicholas Thorndike 428,301,158 23,370,232
A proposal to ratify the selection of Price Waterhouse LLP as auditors
for the fund was approved as follows: 416,248,423 votes for, and
5,035,287 votes against, with 30,387,680 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to diversification was approved as follows: 353,100,261 votes
for, and 34,181,513 votes against, with 64,389,616 abstentions and
broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to investments in the securities of a single issuer was approved
as follows: 340,283,256 votes for, and 41,987,100 votes against, with
69,401,034 abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to making loans was approved as follows: 335,470,457 votes for,
and 47,111,332 votes against, with 69,089,601 abstentions and broker
non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to investments in real estate was approved as follows:
343,662,591 votes for, and 41,979,914 votes against, with 66,028,885
abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to concentration of its assets was approved as follows:
348,054,921 votes for, and 36,272,864 votes against, with 67,343,605
abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to investments in commodities was approved as follows:
342,605,784 votes for, and 41,868,779 votes against, with 67,196,827
abstentions and broker non-votes.
A proposal to amend the fund's fundamental investment restriction with
respect to underwriting was approved as follows: 341,185,678 votes for,
and 40,221,660 votes against, with 70,264,052 abstentions and broker
non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investments in issuers that have been in operation for less
than three years was approved as follows: 335,637,690 votes for, and
48,300,366 votes against, with 67,733,334 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investments in securities of issuers in which management of the
fund or Putnam Investment Management, Inc. owns securities was approved as
follows: 334,464,234 votes for, and 49,063,327 votes against, with
68,143,829 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to margin transactions was approved as follows: 322,384,904 votes
for, and 59,968,129 votes against, with 69,318,357 abstentions and broker
non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to short sales was approved as follows: 326,154,850 votes for, and
56,131,999 votes against, with 69,384,541 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investments in illiquid securities was approved as follows:
322,755,429 votes for, and 58,623,173 votes against, with 70,292,788
abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investments in certain oil, gas an mineral interests was
approved as follows: 339,657,043 votes for, and 45,674,413 votes against,
with 66,339,934 abstentions and broker non-votes.
A proposal to eliminate the fund's fundamental investment restriction with
respect to investing to gain control of a company's management was approved
as follows: 335,135,121 votes for, and 47,896,127 votes against, with
68,640,142 abstentions and broker non-votes.
All tabulations are rounded to nearest whole number.
Fund information
INVESTMENT MANAGER
Putnam Investment
Management, Inc.
One Post Office Square
Boston, MA 02109
MARKETING SERVICES
Putnam Mutual Funds Corp.
One Post Office Square
Boston, MA 02109
CUSTODIAN
Putnam Fiduciary Trust Company
LEGAL COUNSEL
Ropes & Gray
TRUSTEES
George Putnam, Chairman
William F. Pounds, Vice Chairman
Jameson Adkins Baxter
Hans H. Estin
John A. Hill
Ronald J. Jackson
Elizabeth T. Kennan
Lawrence J. Lasser
Robert E. Patterson
Donald S. Perkins
George Putnam, III
Eli Shapiro
A.J.C. Smith
W. Nicholas Thorndike
OFFICERS
George Putnam
President
Charles E. Porter
Executive Vice President
Patricia C. Flaherty
Senior Vice President
John D. Hughes
Senior Vice President and Treasurer
Lawrence J. Lasser
Vice President
Gordon H. Silver
Vice President
Peter Carman
Vice President
Brett C. Browchuk
Vice President
John J. Morgan, Jr.
Vice President
Daniel L. Miller
Vice President
Roland W. Gillis
Vice President and Fund Manager
Charles H. Swanberg
Vice President and Fund Manager
Robert R. Beck
Vice President and Fund Manager
William N. Shiebler
Vice President
John R. Verani
Vice President
Paul M. O'Neil
Vice President
Beverly Marcus
Clerk and Assistant Treasurer
This report is for the information of shareholders of Putnam Voyager Fund. It
may also be used as sales literature when preceded or accompanied by the
current prospectus, which gives details of sales charges, investment
objectives, and operating policies of the fund, and the most recent copy of
Putnam's Quarterly Performance Summary. For more information, or to request a
prospectus, call toll free: 1-800-225-1581. You can also learn more at Putnam
Investments' website: http://www.putnaminv.com.
Shares of mutual funds are not deposits or obligations of, or guaranteed or
endorsed by, any financial institution, are not insured by the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board or any other agency,
and involve risk, including the possible loss of principal amount invested.
[LOGO OMITTED]
PUTNAM INVESTMENTS
The Putnam Funds
One Post Office Square
Boston, Massachusetts 02109
- --------------------
Bulk Rate
U.S. Postage
PAID
Putnam
Investments
- --------------------
31263-007/883/530 3/97
PUTNAM INVESTMENTS [SCALE LOGO OMITTED]
- ------------------------------------------------------------------------
Putnam Voyager Fund
Supplement to Semiannual Report dated January 31, 1997
The following information has been prepared to provide class Y
shareholders with a performance overview specific to their holdings.
Class Y shares are offered exclusively to defined contribution plans
investing $250 million or more in one or more of Putnam's funds or
private accounts. Performance of class Y shares, which incur neither a
front-end load, distribution fee, nor contingent deferred sales charge,
will differ from performance of class A and B shares, which are
discussed more extensively in the annual report.
FISCAL 1997 SEMIANNUAL RESULTS AT A GLANCE
- ------------------------------------------------------------------------
4/1/94 to 1/31/97
Inception date to end of
semiannual fiscal period 22.60%
1/31/96 to 1/31/97
One year period 16.90
8/31/96 to 1/31/97
Semiannual fiscal period 14.32%
- ------------------------------------------------------------------------
Share value NAV
4/1/94 (Inception date) $11.24
7/31/96 $15.85
1/31/97 $16.99
- ------------------------------------------------------------------------
Distributions No. Income Capital gains Total
Long-term
8/31/96 to
1/31/97 1 $0.000 $1.088 $1.088
- ------------------------------------------------------------------------
Please note that past performance does not indicate future results.
Investment return and principal value will fluctuate so your shares,
when redeemed, may be worth more or less than their original cost. See
full Annual Report for information on comparative benchmarks. If you
have questions, please consult your fund prospectus or call Putnam toll
free at 1-800-752-9894.
